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Helping Niece with College

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    Helping Niece with College

    How much causes a Trustee to ask questions? I thought any amount of $600 is questioned if made within the last 90 days or 6 months.

    I was helping my niece with living expenses in college (did stop in May). I did this for about 9 months until I got a levy by the IRS on my bank account.

    The amount was 500/mo. Is this cause for worry?

    I just filed on the 30th.

    #2
    Since your niece was not your legal dependant the Trustee can recover all of the $4,500.00 as a "fraudulent conveyance". The Trustee can recover such a conveyance, under bk law, if the conveyance took place within two years prior to filing, and/or under State law if State law has a longer "look back" period.

    In addition, Question 7 of the Statement of Financial Affairs requires you to disclose all gifts made to family members in excess of $200.00 for the full one year prior to filing. If you did not list the gifts on question 7 you need to amend question 7 to properly disclose the payments.

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      #3
      I had been so caught up in emotions that I didn't think about this. I was going through my bank statements today and realized I'd forgotten about the payments to her.

      I've already contacted my attorney to get the schedules updated. Luckily I have the money to provide to the trustee out of my last check.

      I just wanted to make sure what I needed to do.

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        #4
        Does it make a difference if I'm doing a chapter 7 or chapter 13 in how this will get treated?

        I'm in a chapter 13.

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          #5
          If chapter 13, than a non-issue so long as your chapter 13 plan pays at least $4,500 over the life of the plan. If a chapter 7, then you have a big problem.

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            #6
            HHM: It's actually 3,500 (I just went back and reviewed bank statements). Paying 3,500 back to who?

            How does this portion work?

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              #7
              Originally posted by minan View Post
              HHM: It's actually 3,500 (I just went back and reviewed bank statements). Paying 3,500 back to who?

              How does this portion work?
              To unsecured creditors. So, now you do have a minimum that needs to go to unsecured creditors. But, much less than the 19% that your plan currently provides.
              LadyInTheRed is in the black!
              Filed Chap 13 April 2010. Discharged May 2015.
              $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

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